Which of the Following Is an Example of a Test

question 78

Multiple Choice

Which of the following is an example of a test of controls?

• A)Examining the reasonableness of interest accrued on notes payable.
• B)Verify that cash surrender value of life insurance is classified as a long-term asset.
• C)Using a spreadsheet to create a pivot table for the summarization of accounts receivable.
• D)Reviewing management's monthly bank reconciliations.

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Definitions:

Present Value

The value today of a future sum of money or cash flow sequence, discounted at a particular rate of return.

Equal Amount

A term indicating that two or more quantities are the same in value or measure.

Ten Years

A period of ten consecutive years, often used as a significant measurement of time for planning, analysis, and comparison in various contexts.

Discount Rate

The interest rate that is used in the context of DCF analysis which helps in determining the current value of cash flows to be received in the future.